Hanoi news

Hanoi apartment prices decline

The apartment prices in Hanoi witnessed a decline due to increasing supply (Photo: baodatviet.vn)

Prices of apartments in the local
market in the first 10 months of the year witnessed a downward trend,
said Ha Quang Hung, deputy director of the Department Housing Management
and Real
Estate Market under the Ministry of Construction.

Hung said figures showed that there were some 1,400
successful property transactions in Hanoi in October, increasing 17.9
percent
from the previous year. Meanwhile, the number of successful transactions
in Ho Chi Minh City last month rose by 20 percent from the previous
month to 1,500.

“The figures show that demand in the estate market is on the rise,” he added.

Sharing the opinion, Nguyen Hoai An from CBRE told online
newspaper cafef.vn that the sale price of apartments had reduced both
in primary and secondary markets.

Apartment prices in the third quarter saw a slight decrease from the previous
quarter. The increasing number of apartments in the primary market resulted in
average prices reducing by three per cent from the previous quarter and
decreasing 12 percent year-on-year.

An said despite the price decline, the supply of apartments in the market was
still on the rise. This year, the supply of apartments in Hanoi was expected
to reach the record level of 35,000 apartments, three times higher than the
figure four years ago. The market was expected to have nearly 70,000 apartments
in the 2018-19 period.

The rapid growth of new apartments would create fierce competition in the
market, making estate developers offer preferential programmes to attract home
buyers. This could affect the secondary market, especially investors, she said.

The downward trend of apartment prices has been alarming specialists since the
beginning of this year. According to the Housing Index in Hanoi of the
municipal Department of Construction, released in February, apartment prices in
many areas of the capital have declined since 2011.

Nguyen The Diep, chairman of Reenco Song Hong Company, said apartment prices
depend on market mechanism. If the market has a high number of apartments,
prices will be competitive.

He added that if the market shows healthy competitiveness, home buyers would
benefit from decreasing prices.Speculation seen in estate marketAccording to the ministry’s report submitted to the National Assembly,
information on the property market is not adequate and integrated, causing
difficulties for State management and home buyers.

The report also said this was leading to speculation.

In addition, estate inventories were still significant, especially projects in
areas far from the centre which did not have completed infrastructure, despite
the decline.

As of September 20, inventories in the market were some 26.3 trillion
VND (1.16 billion USD), reducing 15 percent from last year. The supply
of high-end
apartments wasn abundant; however, there was a lack of social housing
projects.

The ministry proposed that authorities should carefully consider the approval
of the investment licence of high-end housing projects to encourage
construction of small apartments to ensure balance in the market.-VNA